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Depreciation and sale of equipment : Downton Smith Ltd
Depreciation and sale of equipment :
Downton Smith Ltd. purchased a piece of machinery on Jan 1st 2013 for €400,000. The company estimated a useful life of 10 years and a residual value of zero for this asset. On December 31st 2015, the company decided to sell the machinery for €350,000.
1. What is the accumulated depreciation of this piece of machinery on December 31, 2015 right before selling it?
€80,000
€120,000
€280,000
€320,000
2. What is the gain or loss on the sale of this machinery at the end of 2015?
Gain of €50,000
Loss of €50,000
Gain of €70,000
Loss of €70,000
Expert Solution
Answers
1. 80,000
2. Gain of 70,000
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